JMJ Marist Brothers

Notre Dame of Marbel University

City of Koronadal, South Cotabato
JUNIOR PHILIPPINE INSTITUTE OF ACCOUNTANTS
A.Y. 2019-2020

NAME:_________________________ SCORE:_______

For items 1-10, calculate the amounts required based on the given data below.

The following account balances are found in the general ledger of Panganiban Trading
as of June 30, 2019 after posting all the transactions and events for the year the ended.

Accounts Payable P 50,000.00

Accounts Receivable 75,400.00
Cash 75,100.00
Communications Expense 3,982.00
Delivery Expense 9,100.00
Furniture 12,000.00
Merchandise Inventory, Beginning 149,800.00
Miscellaneous Income 3,212.00
Notes Payable 20,000.00
Notes Receivable 10,000.00
Office Equipment 15,000.00
Purchase Discounts 9,600.00
Purchases 538,250.00
Purchases Returns And Allowances 16,500.00
Salaries Expense 30,000.00
Sales 779,100.00
Sales Return and Allowances 15,200.00
SSS and PHIC Expense 1,755.00
SSS and PHIC Premiums Payable 585.00
Store Equipment 80,000.00
Store Rent Deposit 15,000.00
Store Rent Expense 30,000.00
Taxes and Licences 3,000.00
W. Panganiban, Drawing 24,000.00
Water and Electricity Expense 29,350.00
Witholding Taxes Payable 240.00
W. Panganiban, Capital 237,700.00

Additional Information:

a. The only item for adjustment is depreciation. Property and equipment are
depreciated at 20% per year.
b. Merchandise Inventory at December 31, 2019 per count is P117,300
 JMJ Marist Brothers
Notre Dame of Marbel University
City of Koronadal, South Cotabato
JUNIOR PHILIPPINE INSTITUTE OF ACCOUNTANTS
A.Y. 2019-2020

Based on the above account balances, determine the following:

1. Net sales
a) 779, 100.00
b) 780, 200.00
c) 763, 900.00
d) 750, 112.00

2. Cost of Goods Sold

a) 544, 650.00
b) 93, 875.00
c) 521, 750.00
d) 538, 250.00

3. Gross Profit
a) 230,300.00
b) 219, 250.00
c) 202, 520.00
d) 220,025.00

4. Net Income
a) 93, 785.00
b) 69, 875.00
c) 97, 583.00
d) 93, 875.00

5. Total Expenses
a) 128, 587.00
b) 107,187.00
c) 128,857.00
d) 129,172.00

6. Current Assets
a) 230, 000.00
b) 295, 800.00
c) 296,012.00
d) 292,800.00
 JMJ Marist Brothers
Notre Dame of Marbel University
City of Koronadal, South Cotabato
JUNIOR PHILIPPINE INSTITUTE OF ACCOUNTANTS
A.Y. 2019-2020

7. Net Book Value of Non-Current Assets

a) 85, 600.00
b) 85, 000.00
c) 107,000.00
d) 12,000.00

8. Total Liabilities
a) 73,825.00
b) 78,235.00
c) 70, 825.00
d) 70,528.00

9. Owner’s Equity Balance

a) 261, 700.00
b) 307, 575.00
c) 213, 700.00
d) 307, 755.00

10. Total Assets/Total Liabilities and Owner’s Equity

a) 360, 625. 00
b) 363, 625.00
c) 378, 000.00
d) 378, 400.00

11. The total liabilities of Roque Company are equal to one-third of its total assets. If
the owner’s equity is P480, 000. How much is the amount of the total assets?
a. P 120,000
b. P 720,000
c. P 240,000
d. P 480,000

12. Kayamo Yan Company sold goods at a list price of P25,000; 10, 2/10,n/30. The
discount to be recorded when paid within the discount period is
a. P 500
b. P 450
c. P 2,500
d. P250
 JMJ Marist Brothers
Notre Dame of Marbel University
City of Koronadal, South Cotabato
JUNIOR PHILIPPINE INSTITUTE OF ACCOUNTANTS
A.Y. 2019-2020
13. Mr. Ko started a business with the following investments: Cash- P25,000;
Building, cost of P100,000 with a fair market value of P150,000; Furniture and
Fixtures, cost P40,000 with a fair market value of P60,000. The entry to record
the investment of Mr. Ko would include
a. Debit- total assets in the amount of P165,000
b. Debit- total assets in the amount of P185,000
c. Credit Ko, capital P165,000
d. Credit Ko, capital, P235,000

14. Merchandise sold P15, 000 is subject to a term: 2/10, n/30, FOB Shipping Point.
The seller paid for the transportation cost, P 1,000. The credit customer will be
allowed a maximum cash discount of--
a. P 320
b. P 300
c. P 1,000
d. P 1,500

15. The accounting equation can be stated as

a. A+L-OE=0
b. A-L+OE=0
c. –A+L-OE=0
d. A-L-OE=0

16. Under the expense method of recording prepayment, the account credited is
a. Accounts Receivable
b. Expense Account
c. Cash
d. Accounts Payable

17. Working capital is defined as

a. Total Current Asset
b. Capital
c. Total current assets less current liabilities
d. Assets used in business

18. The double-entry system of accounting means that every transaction

a. Is recorded initially on both the journal and the general ledger
b. Increases one general ledger account while decreasing another
 JMJ Marist Brothers
Notre Dame of Marbel University
City of Koronadal, South Cotabato
JUNIOR PHILIPPINE INSTITUTE OF ACCOUNTANTS
A.Y. 2019-2020
c. Affects at least two general ledger accounts and is recorded by an equal
amount of debits and credits
d. Result in changes in account on both sides of the balance sheet

19. If the effect of the credit portion of an adjusting entry is to increase the balance
of a liability account, which of the following describes the effect of the debit portion
of the entry?

a. increases the balance of a contra asset account

b. increases the balance of an asset account
c. decreases the balance of an owner's equity account
d. increases the balance of an expense account

20. I. An adjusting entry to accrue an incurred expense will affect total liabilities.
II. An adjusting entry to a prepaid expense is not required to recognize expired
expenses.

a) Both statements are correct

b) Only statement I is correct
c) Only statement II is correct
d) Both statements are incorrect

21. At the end of the fiscal year, the usual adjusting entry to prepaid insurance to
record expired insurance was omitted. Which of the following statements is
true?

a. Total assets at the end of the year will be understated.

b. Owner's equity at the end of the year will be understated.
c. Net income for the year will be overstated.
d. Insurance Expense will be overstated.

22. The balance in the prepaid rent account before adjustment at the end of the
year is $20,000, which represents four months' rent paid on December 1. The
adjusting entry required on December 31 is:

a. debit Rent Expense, $15,000; credit Prepaid Rent, $15,000

b. debit Prepaid Rent, $15,000; credit Rent Expense, $15,000
c. debit Rent Expense, $5,000; credit Prepaid Rent, $5,000
d. debit Prepaid Rent, $5,000; credit Rent Expense, $5,000
 JMJ Marist Brothers
Notre Dame of Marbel University
City of Koronadal, South Cotabato
JUNIOR PHILIPPINE INSTITUTE OF ACCOUNTANTS
A.Y. 2019-2020
23. At the end of the preceding year, the usual adjusting entry for accrued salaries
owed to employees was omitted. The error was not corrected, but the
preceding year salaries were included in the first salary payment and journal
entry in the current year. Which of the following statements is true?

a. Salary Expense was overstated and net income was understated for
the current year.
b. Salaries Payable is overstated at the end of the current year.
c. Salary Expense was overstated and net income was understated for the
preceding year.
d. Capital is overstated at the end of the current year.

24. The balance in the office supplies account on March 1 was $2,200, supplies
purchased during March were $1,800, and the supplies on hand at March 31 were
$1,500. The amount to be used for the appropriate adjusting entry is:

a. $2,500
b. $3,300
c. $5,500
d. $2,200

25. I. The totals of the Adjusted Trial Balance columns on a work sheet will always
be the sum of the Trial Balance column totals and the Adjustments column
totals.
II. A net loss is shown on the work sheet in the Income Statement credit column
and the Balance Sheet debit column.

a) Both statements are correct

b) Only statement I is correct
c) Only statement II is correct
d) Both statements are incorrect

26. The difference between the totals of the debit and credit columns of the
Adjusted Trial Balance columns on a work sheet:

a. is the amount of net income or loss

b. indicates there is an error on the work sheet
c. is not unusual when preparing the work sheet
d. is the net difference between revenue, expenses, and drawing
 JMJ Marist Brothers
Notre Dame of Marbel University
City of Koronadal, South Cotabato
JUNIOR PHILIPPINE INSTITUTE OF ACCOUNTANTS
A.Y. 2019-2020
27. After all of the account balances have been extended to the Income
Statement columns of the work sheet, the totals of the debit and credit columns
are $89,900 and $67,600, respectively. What is the amount of the net income or
net loss for the period?

a. $22,300 net income

b. $22,300 net loss
c. $89,900 net income
d. $67,600 net loss

28. Receipts from cash sales of $7,500 were recorded incorrectly in the cash
receipts journal as $5,700. This item would be included on the bank
reconciliation as a(n):

a. deduction from the balance per depositor's records

b. addition to the balance per bank statement
c. deduction from the balance per bank statement
d. addition to the balance per depositor's records

29. I. An example of a business stakeholder is a bank that has lent money to the
business.
II.Land with an appraisal value of $40,000 for property tax purposes is offered
for sale at $110,000. If a buyer pays $105,000 in cash for the land, the buyer
would record the land in the records at $40,000.

a) Both statements are correct

b) Only statement I is correct
c) Only statement II is correct
d) Both statements are incorrect

30. McGee Company purchased $122,000 of computer equipment from SyTech.

McGee Company paid for the equipment using cash that had been obtained
from the initial investment by Connie McGee. The transaction involving the
computer equipment should be recorded on the accounting records of which of
the following entities?

a. McGee Company and Connie McGee's personal records

b. SyTech and Connie McGee's personal records
c. Only on SyTech
 JMJ Marist Brothers
Notre Dame of Marbel University
City of Koronadal, South Cotabato
JUNIOR PHILIPPINE INSTITUTE OF ACCOUNTANTS
A.Y. 2019-2020
d. McGee Company and SyTech

31. A business paid $9,000 to a creditor in payment of an amount owed. The

effect of the transaction on the accounting equation was to:

a. increase one asset, decrease another asset

b. increase an asset, increase a liability
c. decrease an asset, decrease a liability
d. increase an asset, increase owner's equity

32. How does the purchase of supplies on account affect the accounting
equation?

a. assets increase; owner's equity decreases

b. assets increase; liabilities increase
c. assets increase; liabilities decrease
d. liabilities increase; owner's equity decreases

33. Which of the following is not true regarding Depreciation?

A. Depreciation allocates the cost of a fixed asset over its estimated life.
B. Depreciation expense reflects the decrease in market value each
year.
C. Depreciation is an allocation not a valuation method.
D. Depreciation expense does not measure changes in market value.

34. Failure to make adjustment in the prepayment of insurance expense under

asset method would
A. Make total asset unchanged
B. Understate the total expenses
C. Overstate the net income
D. All of the above statements are true.

35. A current asset which includes coins, currencies and bank deposits is called
A. Accounts receivable
B. Cash
C. Cash equivalent
D. All of the above
 JMJ Marist Brothers
Notre Dame of Marbel University
City of Koronadal, South Cotabato
JUNIOR PHILIPPINE INSTITUTE OF ACCOUNTANTS
A.Y. 2019-2020
36. For each of the following, journalize the necessary adjusting entry.

(a) A business pays weekly salaries of $25,000 on Friday for a five-day

week ending on that day. Journalize the necessary adjusting entry at
the end of the fiscal period, assuming that the fiscal period ends (1)
on Wednesday, (2) on Thursday.

(b) The balance in the prepaid insurance account before adjustment at

the end of the year is $16,000. Journalize the adjusting entry required
under each of the following alternatives: (1) the amount of insurance
expired during the year is $6,500, (2) the amount of unexpired
insurance applicable to a future period is $2,500.

(c) On July 1 of the current year, a business pays $30,000 to the city for
license taxes for the coming fiscal year. The same business is also
required to pay an annual property tax at the end of the year. The
estimated amount of the current year's property tax allocable to July
is $3,600. (1) Journalize the two adjusting entries required to bring
the accounts affected by the taxes up to date as of July 31. (2) What
is the amount of tax expense for July?

(d) The estimated depreciation on equipment for the year is $99,000.

(a) (1) Salary Expense 15,000

Salaries Payable 15,000

(2) Salary Expense 20,000

Salaries Payable 20,000

(b) (1) Insurance Expense 6,500

Prepaid Insurance 6,500

(2) Insurance Expense 13,500

Prepaid Insurance 13,500

 JMJ Marist Brothers
Notre Dame of Marbel University
City of Koronadal, South Cotabato
JUNIOR PHILIPPINE INSTITUTE OF ACCOUNTANTS
A.Y. 2019-2020

(c) (1) Taxes Expense 2,500

Prepaid License Taxes 2,500

Taxes Expense 3,600

Property Taxes Payable 3,600

(2) $6,100 ($2,500 + $3,600)

(d) Depreciation Expense - Equipment 99,000

Accumulated Depreciation - Equipment 99,000